'FinCEN' documents show banks moved illicit funds

Several global banks moved large sums of allegedly illicit funds over a period of nearly two decades, despite red flags about the origins of the money, BuzzFeed and other media reported on Sunday, citing confidential documents submitted by banks to the US government.

The media reports were based on leaked suspicious activity reports (SARs) filed by banks and other financial firms with the U.S.

Department of Treasury's Financial Crimes Enforcement Network (FinCen). The SARs, which the reports said numbered more than 2,100, were obtained by BuzzFeed News and shared with the International Consortium of Investigative Journalists (ICIJ) and other media organizations.

In all, the ICIJ reported that the files contained information about more than $2 trillion worth of transactions between 1999 and 2017, which were flagged by internal compliance departments of financial institutions as suspicious. The SARs are in themselves not necessarily proof of wrongdoing, and the ICIJ reported the leaked documents were a tiny fraction of the reports filed with FinCEN. Five global banks appeared most often in the documents - HSBC Holdings Plc HSBA.L, JPMorgan Chase & Co JPM.N, Deutsche Bank AG DBKGn.DE, Standard Chartered Plc STAN.L and Bank of New York Mellon Corp BK.N, the ICIJ reported.

The SARs provide key intelligence in global efforts to stop money laundering and other crimes. The media reports painted a picture of a system that is both underresourced and overwhelmed, allowing vast amounts of illicit funds to move through the banking system.

A bank has a maximum of 60 days to file SARs after the date of initial detection of a reportable transaction, according to the Treasury Department's Office of the Comptroller of the Currency. The ICIJ report said in some cases the banks failed to report suspect transactions until years after they had processed them. The SARs also showed that banks often moved funds for companies that were registered in offshore havens, such as the British Virgin Islands, and did not know the ultimate owner of the account, the report said.

Staff at major banks often used Google searches to learn who was behind large transactions, it said. Among the types of transactions highlighted by the report: funds processed by JPMorgan for potentially corrupt individuals and companies in Venezuela, Ukraine and Malaysia; money from a Ponzi scheme moving through HSBC; and money linked to a Ukrainian billionaire processed by Deutsche Bank.

"I hope these findings spur urgent action from policymakers to enact needed reforms," CEO Tim Adams said.